London-based billionaire Anil Agarwal-owned Vedanta, a diversified natural resources company, has managed to generate a free cash flow of over ₹11,000 crore last fiscal, despite the storm in metal and mining industry. The cash flow was about three times higher than FY-15.
Addressing shareholders in Goa on Wednesday, Navin Agarwal, Chairman, said the higher free cash flow has helped the company reduce net debt by over ₹6,000 crore and the group’s liquidity remains strong with over ₹52,000 crore of cash and cash equivalents.
Hindustan Zinc, a subsidiary of Vedanta, announced highest-ever dividend of over ₹12,000 crore. Of this, he said, ₹6,500 crore flowed to Vedanta and about ₹5,000 crore was paid to the Government. Vedanta has contributed ₹20,600 crore in the financial year 2015-16.
The company has launched an in-house innovation fund with a first tranche of ₹200 crore to boost technological innovation. The company plans to continue in the path of exploration, process innovation and technological solutions on water and energy conservation and waste management.
Cairn merger On the proposed merger of Vedanta with its subsidiary Cairn India, Agarwal said it remains a strategic priority with the Group’s focus on simplifying corporate structure.
The merger proposal is stuck halfway as the Income Tax Department has attached the 9.8 per cent stake of Cairn Energy Plc over its tax claim of ₹29,000 crore.
In 2014, the I-T Department applied the retrospective tax legislation and issued ₹10,247-crore tax notice to Cairn Energy. In February this year, the department issued a final assessment order seeking over ₹29,000 crore in tax from Cairn Energy, including ₹18,800 crore in interest.
In April 2014, the I-T Department also slapped a tax demand of ₹20,495 crore on Cairn India for failing to deduct withholding tax on alleged capital gains made by Cairn Energy in 2006-07 when it reorganised India business.
Agarwal said Vedanta strengthened its ability to withstand volatility with record production and capacity ramp-up with record production in zinc, lead, aluminium, power and copper during last fiscal.
“We believe that our focus on generating strong free cash flows driven by disciplined capex spending, increased output, optimising cost and deleveraging are the fundamental pillars around which we will continue to strengthen our balance sheet and give returns to shareholders,” he said.